Want to invest in stocks and IPOs? Here is how you can open a demat account

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Want to invest in stocks and IPOs? Here is how you can open a demat account
BCCL
  • Like a savings account holds money, a demat account holds investors’ investments -- stocks, mutual fund units, bonds etc in one place.
  • To invest in the stock market, it is mandatory to have a demat account.
  • India’s penetration into financial markets is low, given only one in every 23 people has a demat account in the country.
India’s benchmark index Sensex, which has delivered 27% returns in the last one year has got a lot of investor attention, thereby increasing the number of demat account holders.

This is because it is mandatory to open a demat account in order to invest in any financial products. Like a savings account holds money, a demat account holds investors’ investments -- stocks, mutual fund units, bonds etc., in one place.

Demat account holders in the country increased by almost 50% to 6 crore as of June 2021, from 4.02 crore in February 2020.

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If you're looking to invest in the stock market, debt instruments, mutual funds or even IPOs, here is how you can do it by opening a demat account.

Here are some example of brokers you can open your account with:

  • Motilal Oswal
  • Angel One
  • HDFC Securities
  • Sharekhan
  • Zerodha
  • Upstox
  • Groww
  • 5 Paisa
  • Paytm Money
List of important documents required for opening of a demat account

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While a demat account can be easily opened online now, one requires several documents to submit online for the know your customer (KYC).

  • Identity proof from any one of these — Aadhaar card, PAN card, driving licence, voter ID card etc.
  • Address proof from any one of these — passport, electricity bill, ration card, gas bill, landline telephone bill etc.
  • Cancelled cheque of bank account you want to transact with.
  • Proof of income from any of these — latest salary slips, income tax returns copy, bank statement for last 6 months, copy of Form 16.
Further, charges to open a demat account differ from banks to stock brokerages to discount brokers to online investment platforms. A typical online investment platform like Zerodha charges around ₹200-300 annually. Banks charge up to ₹900 to open such an account.

Steps to open a demat account

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Step 1: Choose the broker you want to open an account with.
Step 2: Visit the company’s website and start the demat account opening process.
Step 3: Fill out the information required for know your consumer (KYC).
Step 4: Submit the scanned copies including identity proof, bank account statement, income proof, photo to complete the KYC.
Step 5: After submitting all the documents and verifying it, pay the required amount for trading.
Step 6: At the end of the process you will receive a unique 16-digit beneficial owner identification number (demat account no.), which will be used to access the demat account online.
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Step 7: Login with the demat account number and walk in to your investments.

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